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College Accounting

John Price, University of North Texas
M. David Haddock, Chattanooga State Technical Comm. College
Horace Brock, University of North Texas
Connie Hahn, Southern Alberta Institute of Technology
Traven Reed, Canadore College

Analyzing Business Transactions

Multiple Choice Questions


1	When a firm purchases equipment for cash, what accounts are affected?
		A)	Supplies and Cash
		B)	Cash and Equipment
		C)	Capital and Cash
		D)	Cash and Accounts Payable


2	What accounts are affected when purchasing supplies on account?
		A)	Supplies and Accounts Receivable
		B)	Supplies and Cash
		C)	Supplies and Accounts Payable
		D)	Supplies and Capital


3	What is the fundamental accounting equation?
		A)	Assets = Liabilities + Owner's Equity
		B)	Owner's Equity = Liabilities + Assets
		C)	Liabilities = Assets + Owner's Equity
		D)	Capital = Liabilities – Assets


4	Amounts owed by a customer are called?
		A)	Accounts Payable
		B)	Unearned revenue
		C)	Cash
		D)	Accounts Receivable


5	What account is used when an owner removes money from the business?
		A)	Capital
		B)	Office Expense
		C)	Revenue
		D)	Withdrawls


6	Which statement represents a business's activities for a specific period of time such as a month or year?
		A)	Balance Sheet
		B)	Income Statement
		C)	Owner's Equity
		D)	Cash Flow Statement


7	If an investment is made in a form other than cash, the investment should be recorded at its
		A)	Original Value
		B)	Blue Book Value
		C)	Replacement Value
		D)	Fair Market Value


8	If expenses exceed revenue, a business will report a
		A)	Net Loss
		B)	Net Income
		C)	Negative Profit
		D)	Profit


9	Assets, Liabilities and Owner's Equity are all found on which financial statement?
		A)	Income Statement
		B)	Statement of Owner's Equity
		C)	Balance Sheet
		D)	Statement of Cash Flow


10	An inflow of money into a business is accounted for under which account?
		A)	Expense
		B)	Asset
		C)	Liability
		D)	Revenue

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